Spring Conference. Growing Business Services Revenue in a Downturn Economy Panel Session. COMPTEL Spring, March 2009, Dallas, TX

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1 Spring Conference Growing Business Services Revenue in a Downturn Economy Panel Session COMPTEL Spring, March 2009, Dallas, TX

2 Our Panellists Session Moderator Scott Sumner VP Marketing, Accedian Networks Speakers David Strauss VP Marketing Optimum Lightpath Aqeel Asim Director, Data Engineering & Operations RCN Metro Optical Networks Tim McElligott Editor-in-Chief, B/OSS Virgo Publishing John Scarano President, Co-Founder & COO Zayo Bandwidth

3 Session Agenda Opportunities in Business Services Panel: Opening Comments Interactive Q&A

4 Why Ethernet Business Services? Recession-Proofed, High Demand Cost Savings Drives Ethernet migration Enables lower cost communications There will be one bright spot, analysts said. Enterprises increasingly will turn to Ethernet technology because it provides more bandwidth at a lower cost. One tactic service providers can take to offset churn is to start to get more aggressive in rolling out Ethernet services. Ethernet s an answer to the downturn. xchange, Nov 08. quoting In-Stat & D.A. Davidson analysts

5 Introducing High-Margin Services It begins with the pipe. Enterprise GigE Pricing

6 Premium, SLA-Backed Business Services 99.99% Available Committed Bandwidth Latency & Jitter Ultra-Low Latency Platinum Gold Silver $ + 65% $ + 45% $ + 25% Bronze $ Best Effort

7 But We re Not Verizon Ethernet Access Purchase Drivers: 1. Network Performance 2. QoS 3. Price 4. Provisioning 5. Support & Service Catalog 6. Ease of Installation 7. Network Diversity & Availability 8. SLAs 9. Billing Features 10. Provider Source: Atlantic-ACM, Metro Carrier Ethernet Scorecard, Dec. 08

8 Creating the Dozen Play Triple play reduces churn, the same is true in business Incremental services create stickiness Hosted & managed services: high margin & recession friendly Services Planned over Ethernet* Private Line Emulation VoIP SAN Extension Remote Backup Data-Center Mirroring Stateful Firewall DoS Prevention Encryption Streaming Video Videoconferencing Bandwidth on Demand 0% 20% 40% 60% 80% 100% * Source: Infonetics Research, Service Provider Plans for Metro Ethernet, Worldwide Study, 2008 Audio and video clips courtesy of IP Business Magazine, 2009

9 What s required? Performance SLAs per Application Per-Application QoS Optimization (traffic shaping, rate limiting) 24 x 7 End-to-End Monitoring Build it: Create (map) MEF-compliant Ethernet Services: E-LAN, E-Line Establish QoS at the service endpoint: shaping, policing Monitor SLAs & flows: accurately & continuously Extend off-net with guaranteed QoS

10 Spring Conference Q&A

11 Panel: Opening Comments Your Company National Coverage Your Services Today Opportunities in Ethernet / MPLS Hosted / Managed

12 Deploying Carrier Ethernet Services What s the most cost-effective way to deploy & assure? What s the fastest way? How long does it take? Operational Challenges Biggest barrier to entry

13 Deploying Hosted & Managed Services Which services are most in demand? Which services are best wholesaled? Which services are DIY? Which are the easiest? Private Line Emulation VoIP SAN Extension Remote Backup IM / Unified Comm. Data-Center Mirroring Stateful Firewall DoS Prevention Encryption Streaming Video Videoconferencing Bandwidth on Demand

14 Geographic Issues How important is it to address off-net locations? How does this affect deployment options How do you maintain consistency: Service Portfolio Operationally QoS

15 Do or Die? Do these new services cannibalize existing revenue? Is it a necessary evil (like IPTV)? Do you see growth overall? When will returns begin? What happens if you don t?

16 Thank You Spring Conference Presentation on CDs Near Exit Accedian.com/makemoney

17 A perfect storm is brewing. Technological change, the technology investment cycle, and difficult economics are combining to push some types of managed services over the chasm. Henry Dewing Principal Analyst, Forrester 17

18 Demand for Managed Services $12,000 CAGR: + 13% $Millionn $10,000 $8,000 $6,000 Hosted IP Voice Managed CPE Managed Security Network Management Managed Access $4,000 $2,000 $ Source: InfoTech June

19 Demand Drivers Increase in new technologies High cost of capital Shorten tech investment cycle Simplify management Improve reliability and service Focus on core business 19

20 Optimum Lightpath Managed Services Lightpath Managed VPN Lightpath Managed Firewall Lightpath Managed Router Lightpath Managed Voice Lightpath Managed Video 20

21 1 st MSO to target business market (1988) 1 st MSO to exclusively offer IP-based services (2005) 1 st MSO certified by Metro Ethernet Forum (2006) Lit 3000th building (2008)

22 Aqeel Asim Director Data Engineering and Operations Confidential RCN Metro Optical Networks 55 Broad Street New York, NY (212)

23 The Network The Smart Alternative With over 1,200 on-net buildings, network is within 500 ft. of over 20,000 businesses 5,600 Route Miles and 315,000 Fiber Miles leveraging unique, utility rights-of-way Tier 1 IP provider with extensive peering agreements 23 strategically located colocation facilities Confidential 2

24 RCN Metro Ethernet Services Ethernet Hand-off 1Mbps Multi Gbps Ethernet Copper / Fiber handoff Point-to to-point Point-to to-multipoint Inter-Market Circuits CHG, NY, DC, Boston and Philly Multi-t-Multipoint Multipoint ISP over Ethernet Managed Services Off Net Solutions For any off net or remote buildings T1, DS3 and OC3 solutions Managed Services / Customized Solutions Managed Services / Customized Solutions Multicast enabled, BGP ISP dual ISP homed services, From low to High end routers Confidential 3

25 Growing Ethernet Business in Current Market Network Performance Customer Experience QOS Customized Solutions Integrated Managed Solutions Scalability Confidential 4

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